Court Orders Banks To Restrict Osun Accounts

The Federal High Court sitting in Lagos has ordered several commercial banks to place a “Post No Debit” restriction on accounts operated by the Osun State Government over an outstanding $13.9 million arbitration award in favour of Gamji Nigeria Company Limited.

Justice D.E. Osiagor made the interim order after hearing an application filed by Gamji through its counsel, Yunus AbdulSalam, SAN, in a suit marked FHC/L/CS/1233/2026.

The company is seeking to secure $13,924,343.32 and ₦157.5 million awarded to it following an arbitration arising from water infrastructure projects executed in Ilesa West Local Government Area of Osun State.

The financial institutions listed in the order include Guaranty Trust Bank, Access Bank, First Bank, Zenith Bank, United Bank for Africa, Ecobank, Fidelity Bank, Stanbic IBTC, Sterling Bank, Union Bank and Wema Bank, among others.

Justice Osiagor directed the banks to preserve funds belonging to the state up to the value of the arbitral award pending the determination of Gamji’s substantive application.

“A preservation order of interim injunction is granted directing the cited financial institutions in Nigeria to immediately place a Post No Debit restriction on the Respondent’s account domiciled with them for the preservation of the funds with them in the sum of $13,924,343.32 and ₦157,500,000.00 towards the liquidation of the Arbitral Award dated 24th July, 2026 which has become due and enforceable, pending the hearing and determination of the motion on notice,” the court held.

The dispute reportedly arose from two contracts awarded to Gamji by the Osun State Government in June 2017 for the construction of water infrastructure in Ilesa West.

The projects covered the construction of transmission mains and booster pump stations under Slot 1, as well as water reservoirs under Slot 2.

According to the company’s affidavit, the projects formed part of a broader water supply and sanitation scheme funded through an Islamic Development Bank loan facilitated by the Federal Ministry of Finance.

Gamji said the initial value of the Slot 1 contract was $15.98m, while Slot 2 was valued at $9.70m.

It subsequently claimed that changes to the engineering designs and variations in the scope of work led to delays and revisions of the contract values.

Following the amendments, the company said the value of Slot 1 increased to $20.24m, while Slot 2 was revised to $10.95m.

Gamji further told the court that about 93 per cent of the projects had been completed by October 2023 and that the state government issued a Substantial Completion Certificate on November 14, 2024.

However, disagreements later emerged over claims relating to extensions of time, adjustments to contract prices and increased costs of materials and labour.

The company said the state government rejected its claims, while attempts to resolve the disagreement through mediation failed.

Gamji subsequently issued an arbitration notice on April 3, 2025.

The state government reportedly accepted the arbitration process and nominated its arbitrator, with preliminary proceedings taking place in Lagos on May 15, 2025.

The arbitral panel eventually issued its final award on July 24, 2026, directing the Osun State Government to pay Gamji $13,924,343.32 and ₦157.5 million in reimbursable arbitration expenses.

The panel also imposed an annual interest rate of 20 per cent on any outstanding amount after the compliance period expired.

Gamji told the court that the deadline for compliance expired on August 24, 2026, and the state government failed to make the required payment.

The company consequently approached the Federal High Court seeking to preserve funds in the state government’s accounts pending enforcement of the award.

Following the interim order, the court directed the affected financial institutions to restrict withdrawals from the relevant accounts to the extent necessary to preserve the awarded sums.

Justice Osiagor adjourned the matter until October 22, 2026, for hearing of the motion on notice.